Boris Kheifets: The question of preservation of savings directly related to the global geopolitical situation

The largest Cypriot bank Bank of Cyprus sent notifications to Russians about closing their accounts. Invest-Foresight spoke with the professor of Financial University under the Government of the Russian Federation Boris Kheifets, where you can keep now your savings in the most profitable and calm way.

– The largest Cypriot bank Bank of Cyprus sent to Russians notifications about the closure of their accounts. What is the probability that afterwards this bank will also signal the closure of Russian deposits?

– Yes, it is worth recalling that even one bank from the United Arab Emirates gave such a command. There are a number of questions or circumstances here. First, are mainly dollars or euros used for transfers? US, for example, banned use of their currency for transfers of Russians. The second point is, whether it is a friendly country.

The problem is that banks are involved in other transactions as well. And Russians, as a rule, make up a very small proportion of all transactions. Moreover, because of this there is danger of being sanctioned by the US and the international community generally. As a result, it turns out that it is difficult to take risks for such banks.

As a result, everything will depend on the general situation that will develop around Russia. And here the trends, unfortunately, are such that today even measures are being developed to secure legally the confiscation of assets, including assets of individuals.

And, as for the so-called friendly countries, it turns out that friendship may not play such a role as the most trivial and simple business considerations can.

Not to become toxic – this will be the main reason. Therefore, probability of repetition of situations with the closure of Russian accounts by foreign banks is high enough.

– As of January 1, 2023, Russians kept on bank deposits abroad 6.63 trillion rubles, or $94.3 billion. The amount is large…

– These are the statistics of the Central Bank. By the way, I will say that according to the new method of calculations, which the regulator began to apply literally a month after the publication of this figure, it accounted for already $65 billion. However, it is still quite a serious amount.

It is clear that this money still needs to be found. Of course, this is possible according to the results of automatic exchange of financial information within the framework of the convention on combating money laundering. In 2020, there were data that about 700 thousand accounts were opened abroad by Russians, but this does not mean that these accounts are opened by the same number of Russians.

Are you saying that all these Russians can be subjected to sanctions and their accounts can be closed? The question is rhetorical.

– Yes, you’re right! But when problems arise – where to go with this money, in what kind of savings?

– I have already talked about cryptocurrencies, but this path is also very limited. There are, of course, different forms like trusts, for example. However, now a whole group of specialists monitors the situation in order not to let Russia avoid sanctions.

But the fact is that in these total there not only large fortunes, especially while they are stored in gold, in investment funds, and in closed trusts.

That is, there definitely exist legal forms of investments, but again – in case of a great need and some desire, all ultimate beneficiaries, not “nominal board chairmen”, can be found. As for the amounts, it is quite possible that some gradation will be applied, such as the one that was considered in the US bill last year – they talked about the amount of $3 million: its presence on the account may already lead to some additional checks.

In short, in this case, the world as a whole seeks financial transparency, and the point here is not only in Russia.

– The property is considered the most stable harbor for investing, preserving and saving funds. This is true both for abroad, and for Russia?

– In principle, yes. However, remember that the real estate of many wealthy Russians, especially from the sanctions lists, is frozen. It is clear that they continue to use it, but nevertheless. By the way, if this property faces seizure, then it can also turn into a problem for those who did it.

After all, real estate needs to be monitored, it needs to be protected, and you will have to create or hire a management company, which means additional costs.

Moreover, the situation is quite common when certain assets are attributed to children or the owners are divorced, and so on. However, this process cannot be fast enough. And, summarizing, I will say, that there is a threat.

In addition, there is no serious alternative to real estate.

– Let’s go back to our discussion. On the one hand, at the end of 2022 the Russians had savings in the amount of about 48 trillion rubles, on the other – only 40% of respondents have savings. Where they can be stored with maximum profit?

– Honestly, I cannot say for sure. Previously, dollar assets were a more or less reliable safe haven, and it was not about just the currency specifically.

It is possible that those who had such assets pulled them out of banks and stored them, for example, in the same real estate. Giving some advice is not easy now, since there is a very large volatility and a very large uncertainty on this issue.

– What investment options should be avoided? Maybe investments at the stock exchange?

– On the stock exchange just now you can earn a lot in the long run, because there is a very large drop in American sites. And here, on the contrary, everything has grown, by the way.

Investments in ruble assets? There are alarmical predictions about them. So, real estate remains again, especially since this investment is also good from social points of view – families grow, children grow up, and so on.

Where definitely not to invest is in fraudulent pyramids. I am sure that now there will be a lot of them, and we must remember that they will appear unexpectedly, with original offers like 15 or more percent interest in a short time.

Well, the general advice that everyone gives is that you need to diversify your investments. At the same time, the question of how specifically to do this is also far, unfortunately, from an accurate response.

There is no stability of monetary policy in modern conditions. So, instead of all previous sentences, it is quite possible to write that “I find it difficult to answer.”

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